High Sierra Energy Sells Its Natural Gas Storage Subsidiary
Wednesday, June 8, 2011
High Sierra Energy, L.P. ('High Sierra'), a leading diversified midstream energy company, has completed the sale of its 70% owned subsidiary, Monroe Gas Storage Company, LLC ('Monroe'), which operates a FERC-regulated 12 Bcf natural gas storage facility in northeastern Mississippi, to Cardinal Gas Storage Partners LLC. Total consideration for the transaction was approximately $148 million.
High Sierra and its minority partners acquired the depleted reservoir in 2006 and subsequently developed the Monroe facility in order to serve the expanding energy needs of Mississippi and other areas of the Southeast, Mid-Continent and Northeastern United States. In exiting the natural gas storage business, High Sierra plans to direct proceeds from the strategic divestiture to its core businesses, which include crude oil logistics, oilfield water treatment and recycling services, and natural gas liquids logistics.
'Natural gas storage services are no longer a key component of our strategic business model,' said James Burke, High Sierra Energy Chief Executive Officer. 'The divestiture of Monroe Gas Storage presents an opportunity for High Sierra to focus our capital and our efforts on core areas of growth for the partnership.'
Tudor, Pickering, Holt & Co. Securities, Inc., served as financial adviser to Monroe on the transaction.
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